Activity-based costing differs from traditional costing systems in a number of ways. In activity-based costing, non-manufacturing as well as manufacturing costs may be assigned to products. And, some manufacturing costs may be excluded from product costs.
- Discuss other differences between activity-based costing and the traditional costing systems.
- Discuss the reasons that activity-based costing may be resisted by top management.
- Discuss why activity rates are important to management.
- In your opinion, why activity-based costing approach is probably unacceptable for external financial reports.